Cartels and Price Fixing Defence Lawyers

If you or your business face a cartel and illegal price-fixing allegation, you will require expert legal representation at what can be a particularly distressing time.

JMW specialises in this complex area of law, and we understand how disruptive such an investigation can be, both personally and professionally. We are experienced in both helping clients facing a cartel and illegal price-fixing allegation or prosecution and ensuring businesses comply with all necessary regulations.

Our expert business crime team has an in-depth understanding of the laws around price cartels and fair competition and can provide the advice and guidance you will need to achieve a favourable outcome when you or your business is targeted in an investigation. We have a track record of success in defending individuals accused of related offences.

We understand how damaging being at the centre of a criminal investigation can be for you or a business, so we will work to represent and protect you and your business interests at every stage of the process. We will always work with efficiency and discretion, with the aim of securing the best possible outcome for you.

The team has been involved in some of the biggest business crime investigations and prosecutions and is ranked as a Top Tier Fraud Firm by the Legal 500, as well as Chambers and Partners.

To speak to one of our specialist solicitors about how to protect and represent you and your business against an investigation or proceedings, contact JMW Solicitors today by calling 0345 872 6666. You can also fill in our online enquiry form to request a call back at your convenience.

How JMW Can Help

JMW has considerable knowledge and experience in dealing with cartel and illegal price fixing cases, and can help you and your business to launch a strong defence when faced with such allegations.

If you are facing the following circumstances, it is advisable to contact a solicitor immediately:

• You have been accused of a criminal offence related to cartel behaviour, including price fixing, insider trading, market abuse, limiting supplies or production, bid rigging, market manipulation or illegal market-sharing arrangements
• You have been invited to an interview under caution by the Competition and Markets Authority (CMA) or the Serious Fraud Office
• Your premises have been subject to a dawn raid
• A restraint order has been made against you or your business by a court to deny you access to your assets

We are able to advise, support and represent you and your business in the following ways:

• Investigating the legitimacy of the claims being made against you and taking proactive steps to challenge court orders made
• Discussing, advising and representing you in applying for any injunctions or restraining orders against you or your business to be discharged or varied
• Preparing you for an interview under caution, ensuring that anything you say or omit under questioning does not have a negative impact on the outcome of your case
• Advising you on any multi-jurisdictional issues
• Putting the best legal defence in place if any charges are brought

Price cartels and anti-competitive practices are very serious offences, so if you have been accused of any of these crimes, it is vital to speak to JMW Solicitors about your options as soon as possible.

We offer an initial free consultation for all business crime cases, so give us a call today to ensure you have the legal advice and support you need.

What Are the Most Common Types of Cartel Activity?

When businesses conspire to illegally subvert competition laws and the natural functioning of the market, this is known as a cartel. The activities of cartel members include a range of potential offences, of which price fixing is the most common. However, beyond price fixing, activities such as the sharing and distribution of commercially sensitive information, or creating a verbal “gentleman’s agreement” to slice up and share out a market between individual firms, can be viewed as cartel activity and lead to criminal sanctions.

The four most common "cartel practices", which are considered to undermine laws that are in place to protect consumer choice and market competitiveness, are:

Price fixing

Price fixing is an unlawful practice that occurs when a number of companies that would normally be expected to compete against each other conspire to artificially set market prices at a specific rate. This could mean raising, lowering or freezing prices at a specific point, or coming to some other agreement undermining anti-competition laws.

This practice is illegal because it makes it hard for other companies to enter the market and usually leads to higher prices for customers. As such, it is viewed as anti-competitive and anti-consumer.

Another form of this is called retail price maintenance or resale price maintenance. This is where a supplier sets conditions on the price at which a retailer can resell its products, such as telling retailers that they cannot sell a product below a set minimum price or offer discounts beyond a certain level. This is illegal and may be investigated as possible price fixing where retailers are not free to set their own prices, but can also be legal in some circumstances. A supplier can usually recommend a resale price, provided the retailer remains genuinely free to charge more or less.

Market sharing

Market sharing is when competing businesses agree not to compete for certain customers, contracts, products or geographical areas.

They might also divide customers by industry or agree not to approach each other’s existing clients, but the result is to reduce genuine competition in a given sector. This can increase prices, reduce choice and lead to poorer service. Market sharing may breach the Competition Act 1998 even where the agreement is informal or never written down.

Bid rigging

Bid rigging is a form of illegal collusion in which businesses that are supposed to compete for a contract secretly agree how they will bid. The aim is usually to decide in advance who will win or inflate the price paid by the customer.

This may involve companies colluding to submit unrealistic bids so that a pre-chosen winner is the only suitable option, or electing not to bid. Competitors may choose to take it in turns to win bids, which creates the appearance of a competitive tender but prevents genuine competition.

Bid rigging breaches the Competition Act 1998, and individuals involved in cartel arrangements may also face criminal liability under the Enterprise Act 2002.

Output control

Output control is when competing businesses agree to limit how much of a product or service they will produce or supply. Businesses could also agree to limit capacity, restrict sales, delay expansion or reduce production so that fewer goods are available, which can lead to prices freezing or increasing.

By artificially controlling supply, competitors avoid competing freely on price and availability.

When businesses and their directors are engaged in these behaviours, they may face criminal prosecution and serious sanctions. If your organisation has been accused of violations of competition law by the CMA, speak to a solicitor at your earliest opportunity to begin building a defence.

What Is the CMA Investigation Process?

If the Competition and Markets Authority suspects your organisation of involvement in a cartel, it will start an investigation. This suspicion could arise from a complaint, evidence provided by a whistleblower, a parallel investigation or intelligence gained through the CMA’s own regulatory supervision. The investigation process typically unfolds as follows:

• Initial assessment: The Competition and Markets Authority assesses whether there are reasonable grounds to suspect an infringement and whether the case should be prioritised based on its evidence.
• Formal investigation: If the CMA opens a case, it will usually notify the businesses involved and publish basic information about the investigation. Some details may initially be withheld where disclosure could prejudice evidence gathering.
• Gathering evidence: The CMA can issue formal information requests, interview individuals and require businesses to produce documents and electronic records. It may also inspect premises, including through unannounced visits known as dawn raids.
• Analysis and case review: Investigators assess the evidence and legal issues. The CMA may close the case if there is insufficient evidence or if continuing would not be an administrative priority. In suitable cases, the regulator may accept binding commitments from the business to address the CMA’s concerns without the regulator making a formal finding of infringement.
• Statement of objections: If the CMA provisionally believes competition law has been breached, it sends the parties a statement of objections setting out the allegations, supporting evidence and proposed findings.
• Representations and hearing: The businesses under investigation can inspect the relevant evidence, submit written representations and request an oral hearing. They may challenge the CMA’s factual and legal conclusions before a final decision is made. Working with an experienced solicitor to prepare these representations often delivers the best possible outcome, including no further action being taken in some cases.

The CMA will then issue a final decision. It may conclude that there was no infringement or issue an infringement decision. It can order the conduct to stop, impose legally binding directions and fine businesses for competition law breaches. Some cases may instead be resolved through settlement, which can involve an admission of liability and a reduced penalty.

A business can generally appeal an infringement decision or penalty to the Competition Appeal Tribunal. The tribunal may uphold, vary or overturn the CMA’s decision. Speak to the team at JMW if you need support during this process.

Q

What penalties can you face for cartels and price fixing?

A

If a company and its directors are found guilty of price fixing or setting up a business cartel, the organisation could face the following consequences:

• A fine of up to 10% of the company’s annual worldwide turnover
• Seizure of assets
• Paying all of the legal costs associated with the case

Additionally, the individuals responsible may face a number of penalties, including:

• A prison sentence of up to five years
• Disqualification from being a company director for up to 15 years

These are the penalties for cartels and price-fixing activities under UK law, but if the case has an international element, those found guilty might face penalties based on the laws of other jurisdictions.

Q

What factors can influence price fixing penalties?

A

Price-fixing falls under competition law in the UK and is generally considered a violation of the Competition Act 1998. This kind of anti-competitive behaviour can lead to severe penalties for both the businesses and individuals involved. These penalties depend on a number of factors that are unique to each case and could include:

Scope of the offence

The length of time over which the price fixing occurred can significantly impact the penalty, with longer durations typically resulting in higher fines. If the firms involved had a comprehensive, complex system for price-fixing (compared to a more informal arrangement), this could also be a factor.

Companies or individuals that have made substantial financial gains from the illegal activity are more likely to face higher fines. As such, the financial gains resulting from an offence will help to determine the nature of the punishment.

If the price fixing had an international component, penalties might be influenced by laws and regulations of multiple jurisdictions. Some countries have more severe punishments for cartel activities than others.

Level of involvement

Firms or individuals who were the instigators of the price-fixing may receive harsher penalties compared to those who were merely participants. Companies that have been suspected or found guilty of price-fixing or other anti-competitive practices in the past are also likely to face steeper penalties.

Market impact

Companies with larger market shares may face more severe penalties as their actions have a more significant impact on consumers and the market. The extent to which the price fixing has caused consumer harm, such as higher prices or reduced choices, will also be a factor in determining penalties.

While these factors may all cause a business or individual to incur more serious penalties, there are also factors that can mitigate the sentence a guilty party will receive.

Cooperation

Companies or individuals who cooperate with the Competition and Markets Authority or the European Commission (for cases involving the European Union) might receive reduced penalties as a result. This may be offered at the discretion of the relevant authorities, but it is not a guarantee in price-fixing cases.

Corporate policies

The presence of a robust compliance system within a company can affect the penalties it will receive for involvement in a scheme to fix prices. If the business has an effective internal system to prevent price fixing that limited the impact of the price-fixing activity, this could mitigate fines. If you want to develop a policy like this for your business, contact a legal representative who can advise you on the elements of compliance you need to consider.

Legal advice

Finally, working with an expert solicitor and securing a high standard of legal representation can help to mitigate or avoid penalties. A price-fixing, cartels and competition authorities solicitor can challenge evidence, explain your case and make sure you are treated fairly at all stages of the investigation process. This is a complex area of law, and you will require a solicitor with significant expertise in this area. The team at JMW has a wealth of experience with price-fixing and cartel cases and can ensure you receive only the most practical, effective legal guidance.